KUALA LUMPUR: The Employees Provident Fund (EPF) has rolled out a new three-tier savings framework as a reference for Malaysians to maintain different levels of financial security post-retirement.
Launched in tandem with Belanjawanku 2024/2025, the newly introduced Retirement Income Adequacy (RIA) Framework revises the recommended savings level from a single benchmark to three tiers, comprising "basic", "adequate" and "enhanced" levels of savings.
According to the EPF, the RIA Framework, which is set to be implemented in January 2026, allows members to set savings targets that reflect different retirement lifestyles and aspirations.
"This approach emphasises the importance of viewing EPF savings as a source of ongoing income, helping members to understand savings they will need to sustain themselves during retirement," said the pension fund.
The RIA Framework will be based off the Belanjawanku Guide, developed by the EPF and Social Wellbeing Research Centre (SWRC) at the University of Malaya, which estimates the minimum monthly expenses needed for a decent living standard in Malaysia.
According to Belanjawanku 2024/2025, a single elderly person must have access to about RM2,690 monthly for their retirement income to be deemed "adequate".
Under the RIA Framework, a person falling within the "adequate savings" tier must have 240 times the adequate retirement income, rounded down to the nearest RM10,000. Based on the RM2,690 monthly income recommended in Belanjawanku 2024/2025, this amounts to RM650,000.
For the lower tier "basic savings", a person must have 60% of the adequate savings amount, which is RM390,000.
The higher tier "enhanced savings" must have two times the adequate savings sum, amounting to RM1.3mil.
The EPF noted that the basic savings benchmark of RM390,000 represents an increase from the previous RM240,000.
It said there will be a phased transition with the basic savings benchmark increasing gradually by RM50,000 annually over three years until it arrives at RM390,000 in 2028.
Due to the rising cost of living, the RIA Framework will be reviewed every three years starting from 2029, using updated data from the Belanjawanku findings.
Meanwhile, the withdrawal policy for savings above RM1 million will align with the enhanced savings benchmark, offering members flexibility in managing their surplus funds.
Like basic savings level transition, the threshold for this withdrawal will increase gradually by RM100,000 annually over three years.
Additionally, under the Members’ Investment Scheme (MIS), members can transfer 30% of savings above the basic savings amount in Akaun Persaraan to approved funds managed by fund management institutions premised on the new basic savings table effective Jan 1, 2026
EPF CEO Ahmad Zulqarnain Onn said the Belanjawanku and RIA Framework help average Malaysians navigate the challenges in managing household expenses.
“By offering a comprehensive view of monthly expenditure and introducing new savings benchmarks, we aim to guide our members toward achieving a dignified and fulfilling retirement.
"These initiatives not only underscore EPF’s commitment to adapting to evolving socioeconomic realities but also reflect our objective to stay relevant and responsive to changing times. Our goal is to ensure that no Malaysian is left behind in planning for a secure and meaningful future,” he added.
The Belanjawanku 2024/2025 can be downloaded from the EPF website at www.kwsp.gov.my.
The Belanjawanku App can also be downloaded for free from Apple App Store, Google Play, and Huawei App Gallery.
